Upstream energy player, EV Energy Partners LP (EVEP) entered into a deal on Sep 23, to sell its 9% interest in midstream energy player Cardinal Gas Services LLC (“CGS”). The divestiture will be made to E1 Corporation and a group of Korean companies led by Samchully. E1 is a liquefied petroleum gas seller in Korea.
The divestment will fetch EV Energy around $162 million. Subject to regulatory and customary closing conditions, the transaction will likely be completed by the middle of October. The closing of the deal will also depend on approvals from the members of CGS.
EV Energy is expected to utilize the net proceeds to repay debt under the revolving credit facility. The partnership added that the borrowed amount under the credit facility will be utilized in acquiring oil and natural gas properties in the future.
EV Energy’s plan to sell its interest in CGS was announced at the same time when integrated energy company TOTAL SA (TOT) declared plans to sell its 25% interest in Cardinal Gas Services.
Houston, TX-based EV Energy is a master limited partnership primarily involved in the development and production of oil and natural gas resources in the U.S. The company also engages in the acquisition of the properties.
EV Energy currently carries a Zacks Rank #3 (Hold), implying that the stock will perform in line with the broader U.S. market in the next one to three months.
Meanwhile, one can look at better-ranked players in the same industry like Northern Oil and Gas Inc. (NOG) and WPX Energy Inc. (WPX). Both stocks sport a Zacks Rank #1 (Strong Buy).
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